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Decomposing Youth Poverty in 22 Countries

313

equivalence scales. The most commonly used scales include the

square root scale (applied here), (old) OECD scale (i.e. household

head=1, each additional adult=0.7, each child=0.5), and

OECD-modified scale (i.e. household head=1, each additional

adult=0.5, each child=0.3) (Förster, 1994; Hagenaars, de Vos, &

Zaidi, 1994). For sensitivity tests, I replicated the analyses using

the OECD-modified scale. As Burniaux et al. (1998) suggest, while

poverty levels may vary depending on different equivalence scales,

the trends of poverty over time and the rankings across countries

are less likely to be affected. The results and discussion are

provided in Appendix B.

B. BTST Income Poverty, Welfare Effectiveness,

and Household Composition

The three structural predictors of youth poverty are the

market, social welfare, and household composition.

The effect of

market income poverty

, aiming to evaluate young adults’ relative

deprivation in the market income distribution, is measured by the

relative poverty rates based on household income before taxes and

social transfers (“

BTST income poverty

”, or before tax and social

transfer income poverty, is used in the following sections) across

household types. Although relative poverty and inequality are

conceptually and methodologically different, the calculation of

relative poverty is interlinked with the measurement of inequality

(Foster, 1998; Foster & Shorrocks, 1988). BTST income consists of

wages, salaries, property cash income, occupational pensions, and

other market income components but excludes any social transfers.

Similar to calculation of the poverty line and poverty rate based on

net disposable income, the BTST income poverty line is income

below 50% of the median equivalized household BTST income.

Welfare effectiveness

is measured by the ratio of poverty rates

based on net disposable income (after taxes and after social

transfers) to the poverty rates based on BTST income. That is,

welfare effectiveness is evaluated in terms of how much BTST